Dell Sweetens Tracking Stock Offer, Icahn Drops Opposition

Dell Technologies on Thursday raised its offer to buy back shares tied to its interest in software maker VMware to $23.9 billion from $21.7 billion, prompting billionaire investor Carl Icahn to abandon his campaign to scupper the deal. The acquisition of the publicly traded tracking stock will result in Dell becoming a publicly listed company without an initial public offering (IPO). Dell decided to shun a traditional IPO amid uncertainty over how stock market investors would respond to its $50 billion debt pile.Dell said on Thursday it would borrow an additional $5 billion from banks to finance its revised tracking stock offer. Dell made its first offer for the tracking stock in July, and ran into investor opposition over the value of its bid.The revised terms, announced ahead of a scheduled vote on the deal by tracking stock owners on Dec. 11, came following negotiations with several large shareholders. Icahn said he would abandon his proxy fight and lawsuits against Dell. While Dell's new offer still undervalues the tracking stock, the company managed to secure enough investor support to be able to overcome a challenge, Icahn said."We believe we have greatly enhanced value for all tracking stock stockholders, which includes my favorite tracking stock stockholder, Icahn Enterprises LP ," Icahn said in a statement.Dell issued the tracking stock in 2016 to buy data storage company EMC for $67 billion because it could not pay for the entire deal in cash and did not want to add to its debt burden. EMC owned a majority stake in VMware, which Dell inherited.